Innovative indkøb i sundheds- og plejesektoren kan bruges som redskab til at skabe værdifulde og bæredygtige velfærdsløsninger. Disse præsentationer giver et bud på, hvordan dette kan gøres i praksis og tager på forskellig vis fat på værdien i dialog. Præsentationerne blev vist d.20.november 2014 i forbindelse med en nordisk konference støttet af Nordic Innovation.

1. VABPRO
and fundamentals to value-based procurement
2014-11-20
Agenda and introduction

2. Agenda
2 Introduction
3 Case presentations and discussion
1 Program

3. INTRODUCTION

4. 4
A small portion of the population represents the majority of costs in
social and healthcare
Individuals with extensive
social care and health
care 62%
Individuals with extensive
health care and no social
care 38%
% of expenses Segment Comissioner
10% of all inhabitants represent 80% of social
and healthcare expenditure - what are their
characteristics?
2%
7%
10%
19%
4%
6%
18%
35%
Elderly care
Psychiatric care
Institutional care for adolescents
Disabled children
Somatic disease, non-chronic, exkl elderly
Chronic disease, exkl elderly
Elderly with no elderly care
Övrigt**
Elderly care
Psychiatric care
Institutional care for adolescents
Disabled children
Somatic disease, non-chronic, exkl elderly
Chronic disease, excl elderly
Elderly with no elderly care
Other

5. 5
Age/Time
Accumulatedsocialandhealthcarecosts
(illustrative)Financing social and healthcare is a gigantic challenge
Illustrative example of accumulated social and healthcare costs over time/age

6. 6
Age/Time
Accumulatedsocialandhealthcarecosts
(illustrative)
Example elderly care –
”compressed morbitity”
Lowering output costs is not sufficient to tackle cost challenge

7. 7
Time
Needforsocialandhealthcare
How to align
objectives?
A small portion of the population represents the majority of costs in
social and healthcare
Provider
incentives
Improved quality of life and
service as well as lowered costs

8. 8
What are the implications for external service providers in social and
health care in a world of scarce resources?
Current
Totalsocialandhealthcareexpenditure
X
Market growth through total cost
increase is not an option
Innovative service providers benefit
from social and healthcare system
optimisation
= External service provider market
= Other expenses
Alternative development A Alternative development B

9. The VABPRO ambition is to harness value in social and healthcare
services and stimulate innovativeness through value based
procurement
9
Resources Production Output Outcome Value

10. Value-based procurement
10
Resources Production Output Outcome Value
Procurement today
VABRO ambition

11. From output to value/outcome. How come it’s such a large step?
11
Output is rarely 100% aligned
with outcome and value
• There may be exceptions, e.g.
emergency departments
Intrinsic challenges related to
reimbursement based on
outcome/value
• Organisational boundaries
• Definition of outcome and value is
difficult
• Analytically challenging
• Monitoring difficulty
Outcome and value is the result of co-
creation with the client or patient
• E.g. smoking cessation
• To what extent can the provider actually
affect outcome and quality vs. the client or
patient him- or herself
• Risk för client/patient selection?
Causality
• Can the provider realistically affect outcome or
value and to what extent?
• To what extent is the outcome or value a result of
measures taken by the provider as opposed to
other providers or external factors (in addition to
client or patient co-creation)?
• Can the degree of causality be quantified?
The carrot and the stick
• ”Put your money where your
mouth is”
• Is it possible to quantify risk
and return
Identifying the actual challenge
• Lack of information may be a
factor (i.e. what is the actual
state of outcome and value)
Output
Outcome
Value

12. 12
…how have we chosen to interpreted these in the VABPRO - context
There are fundamental differences
between Outcome and Value
• To what extent can providers be
reimbursed for achieving outcome
(e.g. evidence based medicine)
without generating perceived value
by the client or patient
Outcome is ”controllable” to a
higher externt
• Value is perceived by the client and
is therefore subject to subjective
valuation
It’s a philosophical (and
political) question:
• Who is to evaluate the result?
• To what extent do we ”trust”
the individual (e.g. personal
budget)?
Documentation and monitoring
of Outcome and Value are
inherently different
• Different methods and
methodologies
Outcome Value
Outcome and value – is there a difference…
VABPRO seeks to promote such value through user-driven service concept design and innovative procurement process
design – a foundation for this is obtained through jointly agreed outcome and value metrics as well as reimbursement
models that drive improvement in the service delivery.
Outcome refers to ”objective”
quality, while Value reflects
”subjective” quality as perceived by
the individual
• However, defining objective quality is
not straightforward
• The financier’s definition of outcome
is likely to dominate (and may vary)

13. Value as defined in VABPRO
13
VABPRO
Outcome
Ojective value
Comissioner perspective
Value
Subjective value
Individual perspective

14. Value creationIncentives for creating value in service
Value metrics
Definition of value
Dynamics in value creation
14Source: xxx, yyy
Incentives tighed to
value metrics
Value based
reimbursement
Value enhancing
provider behavior
Vabpro
Comissioner
Provider
VABPRO
VABPRO
Individual

15. Empirical evidence
15
CASE EXAMPLES
UK: Reablement US: Accountable Care Organisations
There are three characteristics of an ACO:
1. The organization is led by health care providers and has a
strong element of primary care. Healthcare providers in the
organization are jointly responsible for the total health care
cost and quality of care for a well-defined population.
2. The reimbursement model is linked to quality improvements
and cost reductions for the defined population. If cost
savings are achieved (compared to predicted costs) the
ACO may receive a financial bonus.
3. The organization makes use of reliable and progressively
more sophisticated quality measurements to ensure that the
savings are achieved by better coordination of care and
prevention. The financial bonus are linked to the fulfillment
of the quality measurements.
The Affordable Care Act includes provisions for the
implementation of ACOs. Three pilot programs have been
initiated.
There are some evidence suggesting that ACOs reduce costs,
epically for patients with high and complex care need.
Results from the pilots suggest that clinical quality is improved
by ACOs.
Reablement has been adopted nationwide in the UK for the last
decade.
There are a number of definitions of Reablement:
• Support for people with poor physical or mental health or a
disability to help them live as independently as possible by
learning or relearning the skills necessary for daily living.
• An approach or a philosophy within homecare services –
one which helps people “do things for themselves, rather
than having things done for them”.
Reablement is generally designed to help people learn or
relearn the skills necessary for daily living which may have
been lost through deterioration in health and/or increased
support needs. A focus on regaining physical ability is central,
as is active reassessment.
Reablement improves outcomes, particularly in terms of
restoring people’s ability to perform usual activities and
improving their perceived quality of life. Reablement has been
found to achieve cost savings through reducing or removing the
need for ongoing support via traditional home care. However,
there is currently little research on or evidence to suggest that it
reduces health care costs.

16. Methodology
16
Definition of the service
Definition of target group(s)
Definition of outcome (objective) and value (subjective)
Definition of value metrics
Securing monitoring and evaluation mechanism
Design of Value-based reimbursement model
Design of Value-based procurement model
Identification of joint interface

17. User perceptions from Swedish elderly care…
…as a driver for identifying the relevant focus of a service
Källa: Webbkollen, 2013
Does the individual feel safe in
his/hers current living environment?
Safety at home
For elderly, it is important that someone
has comprehensive knowledge and
responsibility of the elderlys’ care
contacts
Comprehensive
responsibility
The elderly needs support in adjusting
to changing levels of function in order
to maintain independence
Increased level of
independence 47%
37%
57%
10%
17%
13%
43%
45%
30%
Var du med och planerade din
hemgång från sjukhuset?
Fick du någon information om
vad som planerats när du åkte
hem?
Visste du till vem du skulle
vända dig med eventuella
frågor?
Yes Don't know No
Do you know who to turn to in case
of unsafety and questions related
to safety?
Did you receive any information
about what was planned when
returning from hospital?
Where you at any time involved in
planning the discharge from
hospital?
User perspectives on functionaly of elderly care What is like in reality? *

18. Step 1. Identification of the
segments and their characteristics
Analytically driven understanding of characteristics...
18
…as a mean of definiting the target group and relevant service
Step 2. Identifying “value-drivers”
for specific segments and relevant
indicators
Step 3. Service design aligned with
segment needs and to promote
value (incentives connected to metrics)
Drug abuseAlcohol abuse
Somatic illness Mental illness
[illustrative]
1 2 3
4 5 6
7 8 9
10 11 12
1
2
3
4
5
6
7
8
9
11
12
[illustrative]
1
3
7
9
2
4
5
6
8
10
11
12
[illustrative]
MetricsValue
drivers
Health and social care analysis:

19. Approaching outcome and value…
19
…approaching the problem at hand and quantifying benefits
Target group: Effect: Timing:Identification:
Primary prevention:
The objective is to avoid and
adverse event or effect
Secondary prevention:
Acting upon early warning
signals
Tertiärprevention:
Ease effect of realised adverse
event
Wide target group
Strict
selection
Large: Focus on
preventing negative
spiral
Medium:
Reactive
Insecure
(often unquantifiable) Before
At
warning
signal
After the fact
Easy
Difficult
Medium
!
Direct
Selected
symptoms

20. Methodology
20
Service
Target group(s)
Definition of Outcome (objective) and Value (subjective)
Value metrics
Monitoring and evaluation mechanism
Value-based reimbursement model
Value-based procurement model
Identified of joint interface (Outcome | Value)
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Service provisioning
Result
Activites are designed to
maximize value

21. What do we want to achieve?
21
Purpose and objectives of VABPRO
Purpose and objectives
Procurement that is
user-driven based
on real needs
Procurement that
delivers better
quality services
and patient
satisfaction
Procurement that is
problem solving in co-
creation with the
suppliers
Procurement
that creates
over all system
level value
• The main objective is to support and develop procurement
that creates over all system level value
A B
C

22. Different steps with different purposes
22
Purpose of VABPRO
Service
Target group(s)
Definition of Outcome (objective) and Value (subjective)
Value metrics
Monitoring and evaluation mechanism
Value-based reimbursement model
Value-based procurement model
Identified of joint interface (Outcome | Value)
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Service provisioning
Result
Activites are designed to
maximize value
Procurement model does not
micro-manage how services are
provided, thereby encouraing
problem-solving and innovation
among service providers
C
User driven through
increased focus on user
characteristics, problems and
needs
A
Reimbursement model
design to promote the delivery of
higher quality serives and
ensuring individual satisfaction
ensuring improved outcome and
value
B

23. Challenges
23
Purpose of VABPRO
Service
Target group(s)
Definition of Outcome (objective) and Value (subjective)
Value metrics
Monitoring and evaluation mechanism
Value-based reimbursement model
Value-based procurement model
Identified of joint interface (Outcome | Value)
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Service provisioning
Result
Challenge: Defining the new
services/concepts:
• User-focused, analytically driven
• Handling organisational boundaries
(causality and power), profit-sharing
• Potential legal or other system level
barriers
Challenge: Defining the new
services/concepts:
• User-focused, analytically driven
• Handling organisational boundaries
(causality and power), profit-sharing
• Potential legal or other system level
barriers
Challenges: Competence and Data
• Knowledge and resources to make use of, construct, manage and develop further in practice Values based practices – in cases where new
services are produced internally in an organization or for the purpose of procuring these from suppliers on the market
• Availability of necessary data and data processing tools / capabilities for establishing the base line and evaluating outcomes

24. 24
Thank you!